Cebu Pacific readies biggest plane order

MANILA, Philippines — Cebu Pacific is in talks with plane makers Airbus and Boeing for an order of 150 aircraft worth at least $18 billion—the single biggest plane order in the country’s aviation history.

Cebu Pacific president and chief commercial officer Alexander Lao said the airline hopes to place the order within the first half of the year. “The process is still ongoing. We hope to complete the process within the first half of the year,” Lao told The STAR.

Cebu Pacific is processing its request for proposals from both Airbus and Boeing for the acquisition of up to 150 aircraft, a transaction that is set to be the largest purchase of jets for any domestic airline.

In an earlier interview with The STAR, Cebu Pacific chief finance officer Mark Julius Cezar said the airline will allocate P50 billion for capital expenditures this year. The capex was increased by almost a fifth from P42 billion in 2023 to fund the purchase of new planes.

Also, Cezar said Cebu Pacific may need to pay the pre-delivery cost of the 150 aircraft that it is set to buy from either Airbus or Boeing this year.

The carrier, owned by the Gokongweis, is keen on getting the pre-delivery payment straight from its cash flow, but plans to borrow from local and foreign banks to settle the balance.

“It is not well known outside of the aviation industry, but in aviation it is well known that we are one of the most sought after credits in the world,” Cezar said.

At present, Cebu Pacific is dealing with supply chain troubles for both its plane deliveries and parts repair. The worst problem for the airline is that although it expects to own 92 aircraft by the end of the year, 20 of them will be grounded to repair their jet engines.

Aviation supplier Pratt & Whitney is recalling hundreds of engines powering Airbus A320neos to correct a manufacturing defect that it uncovered last year. As the recall affects several airlines worldwide, it takes a minimum of 240 days before the engines are fixed for good.

Cebu Pacific entered into a damp lease agreement with Bulgaria’s flag carrier Bulgaria Air for the rental of two planes between January and April to serve Manila flights to Cebu and Davao.

Likewise, Cebu Pacific is reducing flight volume to long haul destinations like Dubai to increase its fleet for short haul but popular destinations, such as Bangkok and Hong Kong.